House OKs Medicare payment increase

Bill would restore funding to rescue care providers

November 06, 1999|By Karen Hosler | Karen Hosler,SUN NATIONAL STAFF

WASHINGTON -- Taking the lead in a hasty rescue effort, the House voted overwhelmingly yesterday to boost payments to Medicare providers squeezed nearly out of business by 1997 cuts to the popular program for the elderly.

The 388-25 tally was cast after a brief debate conducted under rules that prohibited changes to the measure. The Senate and the White House are expected to cooperate in producing a final version of the legislation, perhaps as soon as next week.

The $11.5 billion package over five years -- aimed at hospitals, nursing homes, home health care agencies and managed-care plans -- restores about 5 percent of nearly $200 billion that was cut.

That amount may not be enough to save health care businesses that have gone bankrupt, but it may provide enough relief to help those just beginning to struggle.

"This probably will stop the hemorrhaging, but it's not going to be a major reversal," said Maryland Rep. Benjamin L. Cardin, a Baltimore Democrat.

All eight members of the Maryland House delegation voted in favor of the bill.

Opponents of the measure protested that it does nothing to extend the life of the program or provide Medicare beneficiaries with prescription drug benefits as President Clinton has proposed.

"There won't be half a dozen votes against this pathetic piece of legislation, yet we never had a proposal for a bipartisan overhaul, and not one single thing was done about providing a drug benefit," said Rep. James McDermott, a Washington state Democrat.

But Republican members who crafted the bill said its goal was to provide quick relief to health care providers that the lawmakers didn't want delayed by a long debate over major changes to the Medicare program.

Lawmakers decided to restore some of the 1997 cuts to Medicare providers after they learned that the payment reductions were almost twice as much as Congress intended.

The legislative intent two years ago was to slow the rapid increase in Medicare costs, which were growing about 11 percent annually. But last year, Medicare payments to providers dropped by 5 percent from the year before.

"Two years ago we made some very important changes that are keeping a vital program alive," said House Commerce Committee Chairman Thomas J. Bliley Jr., a Virginia Republican. "But some of the changes we made went a little too far."

The greatest relief would go to hospitals, particularly in rural areas, where many are on the verge of closing.

"It's a very good bill," said Thomas A. Scully, president of the Federation of American Health Systems, which represents for-profit hospitals. "Is it massive assistance? No. But at the margins, it will probably be very helpful."

Nursing homes would benefit from increased payments for medically complex cases as well as an adjustment to the limits on therapy payments.

Two giant nursing home chains, Sun Healthcare Group and Vencor Inc., filed for bankruptcy this year, complaining their income had suffered severely from the reduced payments. A third, Integrated Health Systems, a Fortune 500 company based in Sparks, Md., announced Monday that it could not make an interest payment on its debts because of sharp revenues losses.

Lobbyists for the nursing home industry prefer the Senate version of the bill, partly they say because it has been more carefully crafted to meet the needs of the sickest patients.

Also, Linda Keegan, of the American Health Care Association, the trade group for nursing homes and assisted living facilities, complained that the House bill eases, but does not do away with, a flat limit on therapy payments as the Senate bill would.

Incentive for rural service

The full Senate has not voted on its version. But that proposal will form a basis for negotiations between the two chambers on the issue, much of which may be conducted informally this weekend.

The House bill will also provide increased payments to managed-care companies as an incentive to offer service in rural areas.

Cardin said the bonus payments are only temporary, but may be enough to persuade CareFirst BlueCross BlueShield to reconsider its decision to pull out of 17 of Maryland's most rural counties by Jan. 1. Unless CareFirst reverses course, about 14,000 Medicare HMO members will be forced back to traditional Medicare.

"We will examine that [issue] when the legislation is finalized," said Laurie Casaday, a spokeswoman for the company.

Another major share of relief would go to home health care agencies. The House bill would delay for one year an additional 15 percent cut in payments that is due to go into effect next fall.

"We're pleased that the Congress has recognized the burden put on homebound patients and is moving to do something about it," said Eric Sokol, of the National Association for Home Care.

Other provisions would:

Offer additional coverage for Medicare patients requiring immunosuppressive drugs to prevent rejection of transplanted organs. Medicare now provides benefits for these drugs for only 36 months, though they often must be taken for life;

Perhaps the only major dispute over the bill relates to a House proposal to change the formula for distributing Medicare funds for teaching hospitals. Those funds are concentrated in a few major centers, including New York City. The House bill seeks to spread the money around the country.

But New Yorkers are howling, and the proposal isn't like to survive in the Senate.

"It's a good idea to be more fair," Cardin said. "But if you're going to cut the pie in a different way, you can't do it politically if the pie is the same size because there's winners and losers. You need a bigger pie."